Provides relative to final average compensation. (6/30/12) (RR1 DECREASE APV)
The bill, if enacted, would centralize the method for calculating retirement benefits across various public employment sectors, limiting the FAC period for non-hazardous duty employees to five years instead of varying periods based on their hire date. The goal is to reduce disparities and ensure a consistent and fair method of calculating retirement benefits, which may have implications for budgeted retirement liabilities and contributions employers must make to LASERS and TRSL. Moreover, by allowing employees who opted for an optional retirement plan before December 31, 2007, to switch back to the defined benefit plan, the legislation seeks to offer greater flexibility and potentially enhance retirement security for many state workers.
Senate Bill 47, introduced by Senator Guillory, revises the calculation of final average compensation (FAC) for members of the Louisiana State Employees' Retirement System (LASERS) and the Teachers' Retirement System of Louisiana (TRSL). The bill aims to standardize the FAC calculation period for different categories of employees, differentiating between those in hazardous duty positions and non-hazardous positions. It proposes to retain a 36-month average for certain current members while extending to a 60-month average for members who enter the system after specific dates. This change is significant as it can influence the retirement benefits of state employees, dependent on their length of service and the date they joined the system.
The sentiment surrounding SB 47 is mixed. Supporters argue that the bill brings much-needed consistency and fairness to retirement benefit calculations, ensuring that employees are not penalized based on their job status or how long they have been employed. On the contrary, opponents raise concerns that extending the FAC calculation period could lead to reduced benefits for some retirees. These discussions reflect broader tensions regarding retirement system reforms, state-funded liabilities, and the adequacy of public employee benefits.
Notable points of contention during discussions of SB 47 included the balance between maintaining fair retiree benefits and managing state budgetary constraints. Some legislators questioned whether extending the FAC period would place an undue financial burden on the retirement systems, given the already existing unfunded liabilities. Additionally, there were concerns regarding the expedited hearing process provided in the bill for any constitutional challenges, raising broader issues of legal oversight and public accountability.